Ontario Premier Doug Ford Ontario shakes hands with Finance Minister Peter Bethlenfalvy, after he delivered the budget at the Queen's Park Legislature in Toronto, on May 15. Ontario Premier Doug Ford's budget projects much higher deficits this year and next.Chris Young/The Canadian Press
Ontario Premier Doug Ford and Finance Minister Peter Bethlenfalvy released their 2025 budget Thursday, framed as a plan to tackle U.S. President Donald Trump’s tariffs and make Ontario’s economy more resilient. Here are six key takeaways:
1. Deficits up, path to balance delayed
Facing economic uncertainty from U.S. tariffs, Ontario is pushing off last fall’s plan to balance the books by next year. While the 2024-25 deficit is smaller than what was forecast in last year’s budget, the province is now projecting much higher deficits this year and next.
In 2025-26, the deficit is forecast to be $14.6-billion, followed by $7.80-billion in 2026-27. Ontario then predicts a small surplus in 2027-28, a year later than planned.
In its fall economic statement in November, Ontario had expected a relatively small $1.5-billion deficit in fiscal 2025-26, and a surplus of $900-million in 2026-27. But these numbers were based on estimates of economic growth before Mr. Trump’s tariffs were imposed on Canada.
2. Tariff relief
The budget builds on Premier Doug Ford’s recent election promise to “protect Ontario,” by offering tax deferrals and new funding for businesses. In addition to previously announced $11-billion in relief for businesses, mostly made up of six months of deferrals on certain provincial taxes, Ontario is creating a new “Protecting Ontario Account.”
The fund, worth up to $5-billion, will provide $1-billion in “immediately liquidity relief” for businesses as an emergency source of funding to save jobs and transform businesses that are facing tariff-related disruptions.
The government says the money will be an “emergency backstop” for businesses that have exhausted other available funding, leading opposition parties to question how businesses will access the funds. Ontario says the new fund will work in tandem with federal government supports.
3. Indigenous funding and critical minerals
A significant focus of Thursday’s budget is on Indigenous partnerships and developing the province’s Ring of Fire and critical-minerals sectors. The government says it will spend $500-million on a new critical-minerals processing fund to attract investment and ensure minerals are developed in the province.
Ontario is also tripling loan guarantees for Indigenous partnerships for a total of $3-billion and expanding eligibility beyond electricity to include energy, pipelines, mining and critical-minerals projects.
4. Alcohol/cannabis changes
The Ontario Cannabis Store will use this badge on certain cannabis products with at least 75 per cent grown-in-Ontario inputs.Ontario Ministry of Finance/Supplied
The government, which has shaken up the alcohol market by allowing all grocery and convenience stores to sell beer, wine and coolers, is now looking to do more on the booze front.
Ontario says it will cut the basic tax rate by 50 per cent for spirits sold on-site at distilleries as well as reduce taxes for microbreweries and ciders. The province also says it is cutting the mark-up rates its provincial retailer, the Liquor Control Board of Ontario, charges for premixed “ready-to-drink” beverages made from wine and spirits.
Revenues to the LCBO are projected to be down about $300-million since last year, however, after the government’s move to open up the market to private retailers.
In addition, the government is introducing a $35-million Ontario grape support program that it says would double the percentage of Ontario grapes in blended wine. The government is also creating an “Ontario made” cannabis badge starting this summer to allow users to seek out local product.
5. Housing starts slow
The budget shows that housing starts in the province are down − way down − making the government’s goal of building 1.5 million homes by 2031 increasingly untenable.
The budget, relying on private-sector projections, expects housing starts to be well-below intended targets over the next few years. While the province needs to build 150,000 homes a year on average to reach its goal, the government is now projecting only about 72,000 starts this year and 74,800 in 2026.
New Housing Minister Rob Flack has acknowledged that the province is facing some strong headwinds and needs to shake up the process for building homes in order to reach its goal.
6. Border patrol helicopters
The government is spending $57-million on two new H-135 helicopters in Niagara and Windsor to beef up police patrols and security at the U.S. border.
Ontario has already spent $134-million on five police helicopters in the Greater Toronto Area and Ottawa, which the government says will help protect the border as well as monitor any instances of violent carjacking, auto theft, street racing and impaired driving.
The Ontario government tabled a budget projecting a $14.6 billion deficit as it outlined billions of dollars in measures it says will protect Ontarians in the face of U.S. tariffs. Some of those measures include funding for tariff-impacted communities and businesses and job skills training, but the leaders of the opposition parties say the budget doesn't go far enough to tackle housing and health care challenges across the province. (May 15, 2025)
The Canadian Press